What is the difference between micro and macro economics - Economics - Introduction

Question

What is the difference between micro and macro economics

Neesa · Accepted Answer

Basis of Difference Between Micro & Macro
Economics
Macroeconomics
Microeconomics

Definition
It aims to study the economy as a
whole and covers different market segments
Focusing on an individual level, Microeconomics studies
a specific market segment
in an economy

Central Approach
Takes an expansive approach by studying the whole economy
More of an individual-centric
approach as it is concerned
with businesses and households
and analyses consumer behaviour,
resource allocation and human choices

Concerned with
Also called the income theory
because it describes the changing
levels of national income of
an economy during a certain
period
Referred to as the price theory,
it deals with factor pricing
such as rent, interest, wage, profits, etc
for land, labour, capital and
enterprise and explains how different
prices are decided

Factors
National income, GDP, distribution, employment, general price
level, money, etc
Demand, supply, factor pricing,
product pricing, economic welfare,
production, consumption, etc

Importance
Preserves stability in the broad
price level and solves the major
issues of the economy like deflation, inflation, rising prices
(reflation), unemployment and poverty, etc
Plays a significant role in regulating
the prices of a product
alongside the prices of various factors of production (labour,
land, entrepreneur, capital, etc) within the economy

Applications
It helps in strengthening policies and uniform resource
distribution at the economic level such as
unemployment, inflation level etc
It helps in developing policies
to facilitate appropriate resource
distribution at the firm level

Examples
National Income & Savings;
Aggregate Demand;
Inflation Rates, GDP;
Rate of Employment, Poverty, etc
Individual Income & Savings;
Determining the price of a
specific good or commodity;
Consumer Equilibrium;
Output generated and produced
by a specific firm

Basis of Difference Between Micro & Macro Economics	Macroeconomics	Microeconomics
Definition	It aims to study the economy as a whole and covers different market segments.	Focusing on an individual level, Microeconomics studies a specific market segment in an economy.
Central Approach	Takes an expansive approach by studying the whole economy.	More of an individual-centric approach as it is concerned with businesses and households and analyses consumer behaviour, resource allocation and human choices.
Concerned with	Also called the income theory because it describes the changing levels of national income of an economy during a certain period.	Referred to as the price theory, it deals with factor pricing such as rent, interest, wage, profits, etc. for land, labour, capital and enterprise and explains how different prices are decided.
Factors	National income, GDP, distribution, employment, general price level, money, etc	Demand, supply, factor pricing, product pricing, economic welfare, production, consumption, etc.
Importance	Preserves stability in the broad price level and solves the major issues of the economy like deflation, inflation, rising prices (reflation), unemployment and poverty, etc.	Plays a significant role in regulating the prices of a product alongside the prices of various factors of production (labour, land, entrepreneur, capital, etc) within the economy.
Applications	It helps in strengthening policies and uniform resource distribution at the economic level such as unemployment, inflation level etc.	It helps in developing policies to facilitate appropriate resource distribution at the firm level.
Examples	National Income & Savings; Aggregate Demand; Inflation Rates, GDP; Rate of Employment, Poverty, etc.	Individual Income & Savings; Determining the price of a specific good or commodity; Consumer Equilibrium; Output generated and produced by a specific firm.